Page 678 - Krugmans Economics for AP Text Book_Neat

b.If the movie theater charges $10, who will buy movie tickets 20. A monopolist knows that in order to expand the quantity of
and what will the movie theater’s profit be? How large is output it produces from 8 to 9 units, it must lower the price of
consumer surplus? its output from $2 to $1. Calculate the quantity effect and the
c. Now suppose that, if it chooses to, the movie theater price effect. Use these results to calculate the monopolist’s
can price-discriminate between students and professors marginal revenue of producing the 9th unit. The marginal cost
by requiring students to show their student ID. If the of producing the 9th unit is positive. Is it a good idea for the
movie theater charges students $5 and professors $10, monopolist to produce the 9th unit?
how much profit will the movie theater make? How large
is consumer surplus?

636 section 11 Market Structures: Perfect Competition and Monopoly